Experienced club employee, now wanting to buy a club

[saintzal]

Hi all,

I'll get straight to the point...

I have several years of experience working in a night club, and even more experience working in a restaurant setting. Added to that, I am an MBA graduate and therefore familiar with buying/finance/accounting operations.

I am now looking to purchase a nightclub of my own , and am finding somewhat obvious questions glaring straight at me. To start, a typical nightclub operates 3 days a week (Fri, Sat, Sun), for about 5 hours a night. 3* 5 = 15. 15*4 = 60 hours a month. Basically, in 60 hours a month, enough profits must be made to pay staff, buy stock, maintain upkeep, and retain a profit. Is there something I am missing?

Are there any ways smaller clubs generate income during the week, or in the daytime (other than serving food, or operating as a bar by day, club by night).

As always, any feedback is most appreciated.
Zal

[jgarifuna]

Hi all,

I'll get straight to the point...

I have several years of experience working in a night club, and even more experience working in a restaurant setting. Added to that, I am an MBA graduate and therefore familiar with buying/finance/accounting operations.

I am now looking to purchase a nightclub of my own , and am finding somewhat obvious questions glaring straight at me. To start, a typical nightclub operates 3 days a week (Fri, Sat, Sun), for about 5 hours a night. 3* 5 = 15. 15*4 = 60 hours a month. Basically, in 60 hours a month, enough profits must be made to pay staff, buy stock, maintain upkeep, and retain a profit. Is there something I am missing?

Are there any ways smaller clubs generate income during the week, or in the daytime (other than serving food, or operating as a bar by day, club by night).

As always, any feedback is most appreciated.
Zal

Hi saintzal,

Those are impresive numbers, considering that many nighclubs are still in business.

I have developed websites for bands and DJs that play in night clubs that open for more that 3 days, the following being one of those night clubs:

http://cityguide.aol.com/longisland/bars/venue.adp?sbid=118132059

I know you were specific by mentioning "typical", but the point I want to bring is that, some clubs may extend their operating hours to increase their bottom line. I have also developed websites for clubs that sell some types of entertainment products to increase revenues.

Other experienced night club owners may be able to add more.

I believe another member on the board made a reference to:

http://www.buybiz.com/

[saintzal]

Thanks for the useless reply. I will be 100% certain never to visit your website or recommend your services.

[jgarifuna]

Thanks for the useless reply. I will be 100% certain never to visit your website or recommend your services.

Dear saintzal,

forgive me if I posted something that may have offended you. I certainly had no intentions in putting a bad taste in your mouth as I value time very dearly. You can be assured that I will not waste your time again, unless you specifically ask for my opinion.

Have a wonderful day and best of luck on your ventures.

Sincerely,

[Michael Black]

Saintzal-

You are looking at an angle of the business, many veterans overlook which is a good thing in my opinion. For most clubs they are made or broken in the short hours that you mention and this is where much of the risk lies. IF and I stress IF, they are very successful during these times, it can be VERY cost effecient with labor and very profitable. But rent and other overhead is all the time which is why many feel the need to be open as much as possible.Often, clubs are open 6-7 days per week at night. Sometimes this works out because people know that they can go to you at any day to get a drink, but for many this may not be cost efficient and could add to the demise of the club. If their normal crowd is spread out too thin, some nights can give it a dead/empty image. Market segmenation and capturing specific promoted nights are key.And these same operators totally neglect the day and early evening hours as you suggest!What about outside normal nights & hours?

Some small bars and restaurants are turtles turning significant revenue because they are open most of the day and can limit labor at times to make it cost effective. Besides food, consider renting the club from everything to band rehersal space, photo shoots, movie shoots,plays, even retail salesof all sorts. Tatoo/piercing,clothes,candy/vending machines,ticket broker,liquor/beer carry out, travel agency, or a 1000 other businesses that are open during the day but not late at night that you can do or sublease out to do. You could market this availability much like most places market for special events and private party packages like bachelor/ette parties, birthdays, corporate meetings, etc..Make sure you get all proper licensing. Always try to position retail or food in the front or near outside foot tand car traffic if possible.Retail up front adds to impulse buying from your nightclub customers coming and especially going-put coat check there too if possible. You may have to limit access to the front or certain portions to limit labor/staffing and make it profitable as well. Consider just a pick up window for food like a late or even 24 hour fast food business.

Much of this, like everything else, would depend on your market that you are in and the target market that you are going after. But, consider different customer markets for extra revenue vs your nightclub business late at night.Surely, you have some ideas in mind.What were you considering so we can discuss this further?

-Mike

[Securitygeek]

One club I worked for rented out the club on Mondays and Tuesdays (the days it was closed) for private parties and things like highschool and/or family reunions.

[saintzal]

Mike,

Thank you for your insightful and well thought out reply. Yes, I do have an idea that I am pursuing...

I want to open an upscale martini bar in South Africa. Basically, with the currency exchange at what it is currently, a bar can be bought for 1/6th of the price it would cost in North America. South Africa is hosting the 2010 World Cup, and historically the economy of a host country booms in anticipation of the event. Either the club doing well, or a favorable currency exchange would result in profits.

I am currently in Canada, and have just finished grad school in the US, but I do hold South African citizenship and would want to run the club myself. Ideally, I'd like something small but upscale in one of the trendier area's of Durban South Africa.

One problem, is that the city is quite well zoned, in that the club district is in a different section than say the business district. Nothing seems inter-connected and therefore, cross marketing would pose a problem. i.e. can't serve the CBD during the day, and the nightclub goers at night.

Do you have any idea how to streamline one market segment (upscale martini bar goers) but still offer other services through the bar space during the week?

Also, do you have any suggestions as far as attracting club start-up investment on an international spectrum.

Thanks again. Looking forward to your reply.

[ca. club owner]

Saint.. Aw man I all ways like fella's like yourself who drop in want someone to give them $1000's of dolla's worth of info for free... Its all good, this is the place for it, but let me be the 1st if I may, and maybe the last as some of my peer's on here might have been waiting for me to express a lil of how a few things work.. And for my good friend who told me to keep it clean. I got-cha!

1st of all, if you are planning to open a night club you are better fit to work a valet and park cars. I could care less bout ur degree and everything else. Because you have failed b4 you even got out the gate. You never, I mean never slam some1 when you yourself are comeing to "US" for help. In this fourm you will get info you need and some you don't need. But you never go off like a 5 year old because some1 extends info you might not need. For 1 reason.. You have no idea who they know. And in this business its all on who you know not what you know. So when you can come correct to this web site for help. Then do it, other wise don't waste our time with. "I worked in a club and went to school so I want to open a club" because I will be the 1st to tell you. Common sense don't cost a dime, and word of mouth is the biggest advertisement in this biz. Clean up you approach find you some $$$ because you going to need it. And when you have landed 300k to 500k then come to "US" for help. I for one take major pride in this business we call a "Night Club" and if your reading this like this guy don't know what he talkn about. Ask someone about my postings.. I been in this business for quite sometime. And my friend you will go broke with the way u starting out........... Regroup then come to us for help......

Money Talks In All Languages....

[saintzal]

Make no mistake about it, I have read your previous posts, and appreciate you taking the time to address my question.

What I don't understand, is what you mean when you say...

"You never, I mean never slam some1 when you yourself are comeing to "US" for help. In this fourm you will get info you need and some you don't need. But you never go off like a 5 year old because some1 extends info you might not need."

Also, without trying to offend you, how have you come to the conclusion that I do not have $200K startup capital already? If you take the time to read my posts properly, you'll note that I have not asked anyone to invest a penny. I simply wanted advice and answers to my questions. If you can't provide that information, by all means don't reply to my posts.

Zal

[Michael Black]

Saintzal-

Is the club district a heavily traffic area during the day/early evening or are the clubs in an industrial area,etc.. Are clubs there more of a destination spot vs people already there deciding to go in one or the other because there are people living and working there? Can you describe the area and how far away the business/residential areas are from the club district?.Without being there and little info, it's difficult to suggest any marketing tactics.

As far as raising capital, without a solid track record,good luck. Rely on personal savings, loans against property/collateral, friends,& family,lotto,etc.. To get investors will be very difficult. The only long shot would to form a club membership of international soccer fans and offer many benefits including some package with the world cup and your future club/bar for $100, $1000 or x? amount each to fund it.You would have to be a very good salesman.The fact that the event is so far off, it would be nearly impossible in my opinion.But it is smart to plan on this market opportunity and you could capitalize on the membership idea once you are open to offset the start-up money. You could try to contact a current bar/club operator there who may not be doing so well and pitch him/her a plan to take it over or partner with but also not easy. Try to marry a very rich woman soon:) or plan on a lot smaller bar.

-Mike

[ca. club owner]

Let me simplify my earlier post if I may.. The guy before who posted a few items that might have been of some help. Were by your statements not what you needed. So to tell the guy "thanks but no thanks, and I will be sure not to reccomend your business. This aint the place for all that, and with that type of response. My friend is like a kid saying, " you won't talk to me so I won't talk to you " And as for "US" I mean the people here like Mr. Black who has expressed a few answers to your questions. There are quite a few people in and on this fourm who Own, have owned or about to OWN a Night Club! Its like anything else, its all in your approach to get the information you need.

As for your capital, I could care less if you had 200k give or take 50 cents. You still need something other wise you wouldn't have come here for help.

In closeing, I am not here to argure right from wrong. White and Black, all I am saying is come here with respect for everyone here that's all.. And if I may use your own quote, " I have read some of your postings " then you should know I might be able to answer your question or question's. There pretty basic...

#1 Depending on you target market which is the most important, you will make more money Thur-Sat.. Sunday is all ways an off day unless you are in a town with nothing to do, most people will party thursday an drag in on Friday. Than party on Sunday an start there week off hung over.

MTNAL

[saintzal]

ah yes, I now see what you are saying. I still however defend my point. Anyone who posts simply to advertise their services and not to provide any answers is wasting everyone's time including yours.

In response, the club I am looking at is in a 'club district'. There are no other types of establishments around, and the area is quiet during weeknights as it is near an industrial area.

The current club owners have invested millions, and are happy to see profits come in Fri-Sun only. My one concern in offering other services through the club (i.e. restaurant during the day etc.) is that it will take away from the image of the nightclub and appear more as a bar/restaurant.

[Michael Black]

Are you intending to go after soccer fans or some sports concept or a completely different concept just going after the increased people looking to party in the city? Given a seperate area of the city, secondary day/evening profits appear to be difficult.People are coming into the nightclub zone as a destination place. Would you consider a sports oriented bar closer to the residential and business ditricts? Otherwise, it appears that you are left to compete and market a hot new club with the limited operating hours within the nightclub district.This will require more capital, planning, and experience.

_ Mike

[wygk]

In Silicon Valley, where there's a lot of "light industry / knowledge workers", it's quite possible to develop a secondary income stream by hosting corporate events during the day and off-nights. You need to be able to clear the space and set up tables; you need high speed Internet access and AV / projection equipment, and you need flexible catering and food service options. You also need a meeting coordinator who can set up "team building exercises" (games) as well as see to day-to-day stuff like getting copies made, arranging merchandise give-aways, etc.

The additional investment is small, and it can turn into a good revenue stream when the club would normally ne sitting empty.